Inflation falls to 4.2% in September


Annual headline inflation fell for the third consecutive month, slowing to 4.2% in September 2016 from 4.8% in August, according to data from the Uganda Bureau of Statistics. Core inflation, which is targeted by the Central Bank, also fell to 4.1% year-on-year from 5.0% (revised) in August.

The prices of food crops and related items, on the other hand, rose 0.3% to 5.1%, driven by a 5.6% increase in the prices of fruits to 1.0% from -4.6% the previous month.

The statistics bureau attributes the drop in annual headline inflation to the decline in core inflation. Prices of other goods, which fell 0.9% to 4.4%, and prices of services (0.9% fall) pulled down core inflation.

Energy, fuel and utilities prices came in at 4.3% versus 3.1% the previous month, due to a 6.6% rise in the prices of charcoal.

The consumer price index, which measures the average change over time in the prices of a basket of consumer goods and services and whose rate of change determines annual headline inflation, rose to 161.12 in September versus 159.68 in August. September’s headline inflation rate therefore means the rate at which the CPI rose was lower than the rate at which it rose in August.


The Arua geographical area registered the highest annual inflation of 6.1% versus 6.2% in August, with a 6.3% rise in housing, water, electricity, gas and other fuels prices contributing the most to the increase. Jinja registered the second highest inflation of 6.1% versus 5.8% (revised) in August, while Fort Portal had the third highest rate of 4.6% versus 4.0% in August.

Monthly headline inflation rose 0.9% versus 0.5% the previous month. The main driver of the rise was a 6.8% increase in prices of food crops and related items compared to 1.9% the previous month. Monthly energy, fuel, and utilities also rose 1.1%, compared to the 0.7% registered in August 2016. Monthly core inflation however fell to 0.1% compared to the 0.4% (revised) increase the previous month.

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